29 September, 2020

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Please, Mr. President, Enough With The politics. Do Not Fear Democracy

By Mangala Samaraweera

Mangala Samaraweera

On 23 March 2020 the Secretary to the Treasury released the Pre-Election Budgetary Position report as required by law. On March 30th, further to preliminary comments, I released a detailed statement on the report. 

The statement advised the President that this report – signed by the Treasury Secretary and Finance Minister – justified the presentation of an illegal and unconstitutional so-called ‘vote-on-account’ without a vote in Parliament. I warned that without increasing the borrowing limit, and putting public finance on a legal footing, “a cash crunch will occur”. 

Tragically, the President did not heed this counsel. Now the President’s Secretary appeals to public servants to bear the burden of the Government’s illegal actions. This is at a time when, in violation of election law, individuals purporting to be state-ministers are drawing allowances whose value would provide Rs. 5000 to 4,900 families. 

The difficulties the government is facing in spending, in borrowing monies and in providing economic relief – which is paltry as a percentage of GDP compared to almost any other country – stem from this disregard for law, the spurning of the largest grant in Sri Lanka’s history and from the myopic and irresponsible tax-cuts everyone warned against earlier this year.   

An economic crisis is upon us. Hundreds of thousands of citizens are at risk of losing their jobs over the coming months. Day-earners are beginning to go hungry. The entire country is anxious and worried about their survival over the next few months. We need to do all that we can to ease their minds and ensure their economic security.

The following arguments may appear technical. But they point to a more fundamental and simply intuited truth. Sri Lanka is a democracy. And democracies cannot function without Parliaments. We cannot manage an economic crisis without Parliament. 

The statesman and lawyers framing our constitution have been very careful to ensure that “Parliament shall have full control of Public Finance.” This safeguard against dictatorship has played a central role in democracy since the Magna Carta, French Revolution and American Revolutions. It has been our tradition too. The spirit emanating from these historic events runs through the solemn clauses and weighty pages of the Donomourgh, Soulbury, First Republican and Second Republican Constitutions. As a result, we can be proud to be Asia’s oldest democracy. We have an unbroken history of facing coups, insurgencies, terrorism and Tsunamis because of our democratic strength. Similarly, at this time of peril, we need our Parliament more than ever. Other democracies, like New Zealand, have shown just how valuable Parliaments can be in ensuring effective, accountable responses to the coronavirus and its aftermath. 

From March 10th onwards the Government has showed utter disregard for the constitution, the law and democratic checks-and-balances in relation to public finance. 

1. On March 10th the Secretary to the Treasury issued National Budget Circular No. 1. This circular, available on the Treasury website, was sent to all ministries and heads of departments authorizing expenditure under Section 150(3) of the Constitution from March 6th onward. This Circular is unconstitutional and has no validity in law. Section 150 (3) of the Constitution states,

“Where the President dissolves Parliament before the Appropriation Bill for the financial year has passed into law, he may, unless Parliament shall have already made provision, authorize the issue from the Consolidated Fund and the expenditure of such sums as he may consider necessary for the public services until the expiry of a period of three months from the date on which the new Parliament is summoned to meet.”

Parliament had already made detailed provision under the Vote-on-Account for the period January 1st to April 30th. Therefore, the question of invoking 150(3) does not even arise until April 30th. Despite this, the Secretary to the Treasury had the gall to crow about this illegal action in the Pre-Election Budgetary Position Report. It is one thing to be an untrustworthy steward of the public’s purse, it is another matter to lie in an official government report. 

2. The Government has also exceeded the borrowing limit of 721 billion rupees for the period January 1st to April 30th. According to Verité Research, the government exceeded the borrowing limit by 120 billion rupees. The legality of that debt is now in question, deeply affecting the credibility of the government when it attempts to raise debt on local and international markets. We will all have to pay the price of higher borrowing costs. 

With the exception of a billion rupees worth of Treasury bills raised in January, all the debt raised between January 1st and April 30th matures after April 30th. Therefore, that debt remains an outstanding liability on April 30th. And thus counts towards the sum of “proceeds as loans to be raised in terms of the relevant laws”, the language used to define the borrowing limit in the Vote-on-Account. 

3. Returning to the question of invoking Article 150(3) after April 30; this too is not possible. In addition to the inability to activate 150(3) when Parliament has already made financial provisions, 150(3) can only be invoked for a limited time period. That time period must be defined and cannot be indefinite. However, in the absence of a “date on which the new Parliament is summoned to meet” that is precisely what exists at the moment. Read with Article 148, which gives Parliament exclusive power of purse, and the constitutionally mandated requirement for the legislative power of our sovereign people to be wielded by Parliament, it is abundantly clear that the government has no authority to draw from the Consolidated Fund. 

Legal provisions aside, Sri Lanka is facing an unprecedented pandemic. Our focus must be laser-sharp on containing the virus and limiting its economic fall-out. This is no time for politics. Or for a constitutional crisis. All arms of the government must activate, stretching every sinew and mustering every measure at our disposal to carry us the country through this calamity. 

We need Parliament to increase the borrowing limit, authorize expenditure and pass new laws. In fact, the only way to secure the money needed for a large fiscal stimulus in the short-run, may be to credibly commit to a debt-brake enshrined in law in the medium-to-long term. Without such a stimulus, there will be no money for the relief measures required and called for by all sections of society. The plans for such a debt-brake have already been prepared in the Fiscal Rules legislation we were drafting. 

As importantly, we need to free public servants’ minds and energy to focus on their jobs (not spend sleepless nights worrying about the legality of their actions or whether they will be paid), we need the confidence of the international community, donor agencies and financial markets. Delays in relief cannot be afforded in this desperate situation. 

Please, Mr. President and Mr. Prime Minister, enough with the politics. Do not fear democracy or the people’s representatives. Avoid a crisis, summon Parliament under Article 70(7), develop a plan in consultation with all stakeholders and let’s get through this, together. 

*Mangala Samaraweera – Former Minister of Finance

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Latest comments

  • 4
    13

    Funny way of putting things Mr. Mangala Samaraweera.
    /
    You represent a “black era of a governing” who………..
    \
    #….. postponed the local government election to oblivion.
    #….. put up a trap and abandoned the provincial council election.
    #….. tried to manipulate the election system using 19th amendment.
    #….. tried to cancel or postpone 2019 presidential election.
    #….. wants to cancel or postpone the due general election.
    /
    Funny indeed……

    • 4
      1

      SCP election ‘alone’ is not the be all end all of democracy, it only enables the election of peoples representative to the legislature to govern ‘within’ the framework of what is called the constitution. It does not give any elected representative to exceed the boundaries of authority as defined by the constitution, written or otherwise. You have to expand your knowledge and understanding of democracy, its principles and its functioning by reading on the subject, like referring to Erskine May for instance or at least spend sometime living in a country that practices true democratic traditions of governance and experience it before making half baked comments in this forum.

      • 1
        5

        The difference between a democracy and a dictatorship is that in a democracy you vote first and take orders later.
        In a dictatorship you don’t have to waste your time voting.

        Charles Bukowski

    • 4
      0

      Dear Mr Samaraweera,

      You had been a good minister of finance.

      See how have they been struggling today not even being able to settle thrivial issues such as distribution of 5000 bucks to the poor.

      https://www.youtube.com/watch?v=IvKiAXYt5c4

      https://www.youtube.com/watch?v=IvKiAXYt5c4
      .
      See how have they been struggling today not having reduced the petroleum prices going by that formular you then introduced to the nation ?
      :
      Ironically, the very same PUNNKU eaters dominated srilanka does not raise a single question as to why they have not yet given that concession to the people … in Europe it is like 15-20% price reduction in petroleum prices.. In Germany it is subjected to change every minute – according to their formular…
      :
      Today, that MAN with PADIKKAM STYLE mouth piece – most known Bandula Gunawardhana utters only lies to the media – media are made silent for some reasons… they dont raise the question not at all. ????
      Why do the local media men behave this much of servile to Rajaakshe bitch’s sons ?

    • 0
      0

      This comment was removed by a moderator because it didn’t abide by our Comment policy.

      For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2

    • 0
      0

      S C Pasqual ,

      What I find funny about the write up is , the language Mangala used
      to call Sirisena during the crisis of Yahapalana dismissal and the
      way he begs to Gota ” please, please , please ” Why begging ? Is he not
      a recognised senior most political figure in the country ? Does he
      believe it is something of mannerism or training for somersault ? I
      believe he underestimates the values of his words .

  • 8
    0

    CT

    Could anyone explain to us the plebs as to how the Election Commissioner Mahinda Deshapriya let the National Hangman Gota (while being a loyal citizen of the USA) to contest presidential election in November 2019?

    Does that explain Mahinda Deshapriya’s personal request has been honoured by the American President?

    Please read:

    The United States Federal Registry run by the National Archive and Records Administration has published President Gotabaya Rajapaksa’s name on its quarterly published expatriate list of individuals renouncing United States citizenship.
    The list (document number 2020-09814) published yesterday, prepared by the Internal Revenue
    Service (IRS) of the US Treasury, lists details of those renouncing US citizenship. This list includes people whose information was received by the Treasury Secretary up to the quarter ending 31 March.
    President Gotabaya Rajapaksa’s name is listed
    on page 29 of the document.
    The 40-page document is available for preview or download on https://www.govinfo.gov/content/pkg/FR-2020-05-08/pdf/2020-09814.pdf

    Weekend FT, 09 May 2020

    A mad American was allowed to kill, maim, abuse, commit war crimes, human rights, ……………………. deny rights according to UN charter, free convicted psychopaths, … which the Sinhala/Buddhist smartass patriots believe is a sacred duty and strenthen his hands.

    • 7
      0

      This development has now opened the possibility of a legal challenge in courts the election of the sitting president who at the time of the election was not a citizen of the country. It will be keenly watched to see if anyone has the courage and/or the means to do so to prevent the election of a non citizen being seen as a precedent in the future.

      • 1
        5

        Mr. Native Vedda,
        Mr. Ari,
        /
        You fools are very funny……

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